Home Buying in 95037>Question Details

Olivadorilag, Home Buyer in Morgan Hill, CA

I need help in my decision. Should I get a brand new duet home in a very nice location in Morgan Hill, CA or a single family home in north Gilroy?

Asked by Olivadorilag, Morgan Hill, CA Fri Feb 1, 2013

I work in Sunnyvale, CA and my husband works in Watsonville, CA. We are looking for a new home where it meets us halfway (as far as commuting to and from work). Also, we are a looking for a safer and family-friendly town since we have a baby on the way very soon. We decided to relocate to Morgan Hill. Unfortunately right now, the home inventory in Morgan Hill is very low. We are facing stiff competition with other buyers when looking for Single Family Homes. Then we came upon a new construction site where they are building duets. We never considered buying a duet home, but the price was affordable and it's in a very nice location of Morgan Hill. However, my husband is leaning towards a single family home and we found one in Gilroy. Both the duet home in Morgan Hill and the SFH in Gilroy are about the same price. The duet is much smaller size, 1,660 sq ft vs 2,500 sq ft home in Gilroy. But which one is better as far as resale value? Morgan Hill or Gilroy?

Help the community by answering this question:


Do talk to your buyer agent to get data on this from the MLS-or are you strictly working with the builders' listing agents on this?

How are the schools in the two locations? Keep in mind if the price is the same for both properties yet they are so different, it's likely to remain the same. Which one will you be most happy in.

Also keep in mind new construction tends to initially decrease in value (once it's no longer "new").
0 votes Thank Flag Link Sun Aug 25, 2013
Hi Olivia

Thanks for the question. Obviously, you have a Realtor helping you find a home, what does he or she say about the housing markets in the two cities? Ask your agent these questions first because your agent knows you and your buying needs the best, and will give you the most accurate advice.

Second, there is a reason a duet in Morgan Hill costs as much as a single family home in Gilroy. One word...demand. The home with the greater demand is worth more, and that pretty much answers your question about which will gain more value now and in the future.

While I will never argue that single family homes in the same town is worth more than an attached model, if you place the two homes in different towns 12 miles away, well the home closer to the areas where most people travel will win every time. The winner this time, in my opinion, Morgan Hill. And, sorry, but I have watched Gilroy and Morgan Hill prices for 20 years and still Morgan Hill is the winner in terms of appreciation.

So my recommendation, which is a general one and can vary greatly if I knew you better, would be to buy a home in Morgan Hill rather than Gilroy. You, however, should choose a home based on your housing needs first and the investment value second. Okay?

Good luck,
Grace Morioka
Allison James Estates and Homes
Up to 50% commission rebates to buyers and 1.5% listing for sellers
0 votes Thank Flag Link Sun Feb 3, 2013
So a few other points. First, though I have an office in San Jose, and am acknowledged by Trulia as an "expert" on the Los Gatos market, I have lived in Morgan Hill - Gilroy for 15yrs. I know what we call "South County" better than 99% of the Realtors in the market. Here are sections of my website dedicated just to Morgan Hill & Gilroy http://www.JustMorganHill.com and http://www.JustGilroy.com

I mentioned I not only specialize in South County but also new home construction, but I forgot to include the links to http://www.StuCarson.com/JustNewHomesSouthCounty
and http://www.JustNewProperties.com

Pay special attention to the discussion on "Why most builders don't want you to have your own agent?".

You made no mention of schools in your question. If you have school aged children that makes the decisions between Morgan Hill and Gilroy even more interesting. Again I have facts and data I can share with you that will help you make an informed decision. Here is a section of our website that begins to help folks with that aspect of their decision http://www.JustSchoolInfo.com

What is the probability that your husband will ALWAYs have his job be based out of Watsonville? Or perhaps another way to think about it... is there any chance that he might in the next 5yrs? 10yrs? end up getting a job or having to find a new job that would more likely be found in Silicon Valley? San Jose and north? If so, Morgan Hill starts looking better for both of you.

Ultimately the values for homes both in Gilroy and Morgan Hill tend to rise and fall together. The rises and falls are slightly greater in Gilroy than Morgan Hill. So, working together as your agent and a couple , you might decide to eliminate that factor in your decision making.

Ultimately financial factors aside, there is a fundamental difference in owning a duet vs. a single family detached home. Your home is your castle, especially after a long commute which you both have to face. The home you choose you want to be happy with for many years to come. The $'s you saved by going with a duet might come down to $40k which will amount to about $50/week greater cost of housing which with you both working and therefore being able to use interest and property taxes as a way to reduce income tax paid to the state & IRS means that the net cash flow difference is more like $32/wk. And in the long long run, I would say a detached home in a rising market will rise more than an attached, and on the other hand in a falling market the attached will likely fall slightly more in value. So the financial factors between the two will become even smaller.

Which leads me to my final advice, and that has to do with why one might choose one community over another, for very subjective reasons. If you'd like to have that discussion and haven't selected a Realtor to represent you yet, and you want one that is smart, trustworthy & caring... call or email my assistant Davlyn or I.

Stu Carson, 408-209-0849

Davlyn Giovanetti-Quick, 408-461-1276

0 votes Thank Flag Link Sat Feb 2, 2013
Great questions. Tough questions. One of the most interesting parts of being a Realtor is helping couples work through decisions like this. If you do not have a Realtor that is smart, trustworthy & caring pick one this weekend because as you may have noticed prices are already rising for the spring-summer seasonal peak and it's possible that by May/June you will have lost the price advantage in Gilroy and/or you will be paying $25k to $50k more for Morgan Hill.

As you can tell from my website, I specialize in a few areas and one of them is new home construction sales. From your write up I would guess you are talking about Jasper Hill $475k-$550k in Morgan Hill as compared to for example K. Hovnanian's Aviana development in the mid $500's.

One thing that has been helpful for my clients in the past making commute centered decisions like you are facing is I put together a spreadsheet of the actual drive times for different properties. You'd be surprised sometimes for example how small the difference is between Morgan Hill and Gilroy homes depending upon where each home is in both towns. Here is an example I made this morning which based https://docs.google.com/spreadsheet/ccc?key=0AjiHoKj4ywq7dDJ…

I have found that helping clients see the "hard data" the real facts helps them make their decision.

Other facts that could be looked at in your decision are schools, speculation of market appreciation, personal preference on type of community, etc... I will send you more facts & thoughts on these factors for consideration in your decision later this morning.

You will notice that I included in the commute distance & drive times spreadsheet 40 Canterbury. This is a home clients of mine will be selling very soon. Again if you are interested in finding a smart, trustworthy & caring agent that can help you through the decision making process, finding the right home, getting into contract at the best possible price & with the best possible terms, protecting you through the inspections, disclosures and other aspects of the buying process, as well as help you get connected and oriented in the community after the purchase... call or email me. Time is of the essence.

More to follow...

Stu Carson
Davlyn Giovanetti-Quick
0 votes Thank Flag Link Sat Feb 2, 2013
Hi Stu! Thank you so much for your feedback and providing the spreadsheet. We've noticed the prices have jumped quite a bit in both Morgan Hill and Gilroy. The new construction site is by Butterfield and Tenant. They bumped the prices close to the mid-$500K for the duets (it was under $500K just few weeks ago and we missed it!). The house in Gilroy is not Aviana. We looked into this community. The starting price for the smallest home is now in the low $600s. Just last year, it was at $500K. Huge jump! The house we are referring is located east of Santa Teresa (I wish it was in the west side) and it is very close by Antonio del Bueno Elementary school, which from what I gathered is not really a great school. This house is built in 2005 and it is priced at $500K. There are a some things needed to get fixed and appliances to replace before moving into this home. Also, the seller demanded that the buyer will pay 50% of the escrow and title cost. Is this normal?
Flag Sat Feb 2, 2013
This question is both quite complicated and quite simple. I will give you a more detailed answer for the complicated part of it and then a much more simple answer.

New construction typically commands a premium compared to the resale home market. Then the builders often ask an additional premium for the upgrades like tile vs vinyl, hardwood vs carpet, or granite vs tile. Therefore, a brand new duet in Morgan Hill will be a little high but you will get that new-house satisfaction. You will be on average ten minutes closer to Sunnyvale and get the more small town feeling that comes with living in Morgan Hill. The main disadvantage to a duet home in general is the slight stigma that comes from being attached to your neighbor. It may be perceived a little differently and usually the price for them reflects that perception.

It's common knowledge that prices are 10-20% lower in Gilroy. This is the effect of the additional distance from job-centers in Silicon Valley and the not quite as appealing downtown (although it is improving rapidly). However, there is much to be said for the additional 800+ square feet you are looking at in Gilroy. And if the home is in northwest Gilroy near Luigi Aprea Elementary you may get the great benefit of Gilroy's top-ranked school and the new Christopher high school.

Do your research by making your commutes from both locations and researching schools if you have or plan to have children. If you like to go out, check out the downtown areas and other amenities. They both have so much to offer.

But in the end, my simple advice would be to choose the property that appeals most to you both. Does it feel like home?

If I can be of further help, I would welcome your call.

Good luck,

John Wunderlich
Wunderlich Realty
President - South County Realtors Alliance
(408) 201-4007
0 votes Thank Flag Link Fri Feb 1, 2013
Thank you John for your insightful and detailed answer! This particular duet in Morgan Hill includes all the upgrades already (unlike Ironhorse or K.B. Homes), plus the builder will landscape both front and backyards at no cost. HOA is $60 per month. There are two small parks nearby and a big park just around the corner. Also, it's just a 5 minutes drive to downtown Morgan Hill. The Gilroy home, on the other hand, is located east of Santa Teresa but in the north side (close to Antonio del Bueno elementary school). The house is definitely spacious and has a great layout but there are a few things needed to get fixed before moving in. In addition, I have to buy all new appliances (the duet home already comes with all new appliances). HOA is $178 per month. There is only one small park close by but can drive 2 minutes to the bigger park, Las Animas Veteran Park. My husband and I have to make a concrete decision by this Sunday. We are still debating.
Flag Fri Feb 1, 2013
I am familiar with the new Duets in Morgan Hill and feel they would nor only be the best fit for your circumstance,s but would have the best long term value for resale due to being much closer to Silicon valley. Both Cities are are very nice but Morgan Hill wins out on this major factor.
A duet is still a single family home with it's own garden and the monthly fees involved are minimal and are often found in newer developments.
Good luck,
0 votes Thank Flag Link Fri Feb 1, 2013
Single family usually offers the better resale value. Because you have no shared walls. With the duet you have dues and rules to contend with.

Look at the schools because they also affect resale.

My best advice to you is to buy for yourself. Not for others. What fits for your family. Predicting the future and what other buyers will do can drive you crazy.

What does your agent advise?

Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Fri Feb 1, 2013
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